Economics assumes that human behavior reflects "rational self-interest." This means they allocate their time, energy, and money to maximize their satisfaction.
a. true
b. false
a. true
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If a government wants to pursue an expansionary fiscal policy, then a tax cut of a certain size will be more expansionary when the
A. unemployment rate is low. B. economy's MPS is large. C. economy's MPC is large. D. economy's MPC is small.
Using the Keynesian model, the effect of a decrease in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the short run
A) a decrease; a decrease B) a decrease; no change C) an increase; an increase D) no change; a decrease
An appreciation of a nation's currency is
A) a situation in which exchange rates are allowed to fluctuate in the open market in response to changes in supply and demand. B) the increase in the exchange value of one nation's currency in terms of an other nation. C) a nation in which households, firms, and governments buy and sell national currencies. D) the decrease in the exchange value of one nation's currency in terms of another nation.
The term institutions is commonly used to refer to:
A. government bodies. B. development agencies. C. international groups. D. All of these statements are true.